PSOJ concerned about bank bill proposal
The Private Sector Organisation of Jamaica (PSOJ) is expressing concern about the proposed amendment to the Banking Services Act, which seeks to regulate price setting in banks. In a statement yesterday, the organisation said that it "views this as a retrograde step where the State, once again, will return to pricing controls. In particular, the proposed 'minimum service package' proposed seeks to place the power to set fees in the 'hands of Parliament', through Section 4 (8), and in the twelfth schedule details how fees and transactions are to be determined, which will have the impact of removing the competitive distinction from the market and making it less efficient."
The PSOJ's anxiety comes in the wake of Member of Parliament for St Catherine Southern Fitz Jackson opening the debate in Parliament on Tuesday regarding his private members' bill, which is crafted with the intent of amending the Banking Services Act to strengthen the regulation of licensees under the law as it relates to depositors.
Jackson has accused some deposit-taking institutions (DTIs) and banks of placing emphasis on extracting incremental amounts from depositors' accounts to make profits instead of using the privilege of their licences to earn from lending and credit facilities.
The bill, among other things, proposes the removal of fees, charges, or payments for cashing or changing cheques. It also calls for the removal of charges for statements required for statutory reasons, which Jackson said applies mainly to government employees who are mandated by the State to do so.
NEED WIN-WIN SOLUTION
But according to the PSOJ, "While we are very aware of the public outcry against the cost of banking services in Jamaica, we view the attempt to deal with the matter in this amendment as misguided and contrary to the recent confidence we have seen under the economic programme, which has been primarily led by fiscal and legislative changes to promote greater market participation."
Calling on the authorities to engage them in discussions to find a "win-win solution and not seek to further regulate a market that has been suffering from overregulation", Paul Scott, PSOJ president, stated that "the only way for the Jamaican economy to grow sustainably from decades of stagnation is to create an efficient capital market and make capital available for expansion and investment, through deregulation, not by further trying to regulate a market already suffering and paying the price of overregulation".